05/03/09

"As more newspapers go out of business in the coming years, I think it's
important that our sympathy for individual employees not translate into
the fetishization of newsprint as a medium. And it's especially
important that we not confuse newsprint as a medium with journalism as
a profession. Newsprint and journalism have been strongly associated in
the past, but this an accident of technology, not something inherent to
journalism. Journalism—the process of gathering, summarizing, and
disseminating information about current events—has been greatly
enriched by the Internet. Journalists have vastly more tools available
for gathering the news, and much more flexible tools for disseminating
it. The replacement of static newspapers with dynamic web pages is
progress."

Today I would like to talk with you
about a subject that always gets certain journalists going: the future
of newspapers, and it's a subject that has a relevance far beyond the
feverish, sometimes insecure collection of egos and energy that is the
journalistic profession.

Too many journalists seem to take
a perverse pleasure in ruminating on their pending demise. I know
industries that are today facing stiff new competition from the
internet: banks, retailers, phone companies, and so on. But these
sectors also see the internet as an extraordinary opportunity. But
among our journalistic friends are some misguided cynics who are too
busy writing their own obituary to be excited by the opportunity.

Self-pity
is never pretty. And sometimes it even starts in journalism school—some
of which are perpetuating the pessimism of their tribal elders. But I
have a very different view.

Unlike the doom and gloomers,
I believe that newspapers will reach new heights. In the 21st century,
people are hungrier for information than ever before. And they have
more sources of information than ever before.

Amid these
many diverse and competing voices, readers want what they've always
wanted: a source they can trust. That has always been the role of great
newspapers in the past. And that role will make newspapers great in the
future.

If you discuss the future with newspapermen, you
will find that too many think that our business is only physical
newspapers. I like the look and feel of newsprint as much as anyone.
But our real business isn't printing on dead trees. It's giving our
readers great journalism and great judgment.

It's true
that in the coming decades, the printed versions of some newspapers
will lose circulation. But if papers provide readers with news they can
trust, we'll see gains in circulation—on our web pages, through our RSS
feeds, in emails delivering customised news and advertising, to mobile
phones.

In short, we are moving from news papers to news brands.
For all of my working life, I have believed that there is a social and
commercial value in delivering accurate news and information in a cheap
and timely way. In this coming century, the form of delivery may
change, but the potential audience for our content will multiply many
times over.

The news business is very personal for me.
For more than a half century, newspapers have been at the heart of my
business. If I am sceptical about the pessimists today, it's because of
a simple reason: I have heard their morose soothsaying many times
before.

The challenges are real. There will probably
never be a paperless office, but young people are starting paperless
homes. Traditional sources of revenue—such as classifieds—are drying
up, putting pressure on the business model. And journalists face new
competition from alternative sources of news and information.

So we have a steady stream of stories like The Economist
cover declaring that 'newspapers are now an endangered species.' That's
quite ironic coming from a successful and growing magazine that likes
to describe itself as 'a newspaper'.

My summary of the
way some of the established media has responded to the internet is
this: it's not newspapers that might become obsolete. It's some of the
editors, reporters, and proprietors who are forgetting a newspaper's
most precious asset: the bond with its readers.

When I was
growing up, this was the key lesson my father impressed on me. If you
were an owner, the best thing you could do was to hire editors who
looked out for your readers' interests—and give these readers good
honest reporting on issues that mattered most to them. In return, you
would be rewarded with trust and loyalty you could take to the bank.

Over
many decades in newspapers, I have been privileged to witness history
being made and printed almost every night. Today I'd like to talk about
what these experiences have taught me—and why they give me confidence
about the future.

My intent is to use my experience to
illuminate the way we need to respond to the two most serious
challenges facing newspapers today. The first is the competition that
is coming from new technology—especially the internet.

The
more serious challenge is the complacency and condescension that
festers at the heart of some newsrooms. The complacency stems from
having enjoyed a monopoly—and now finding they have to compete for an
audience they once took for granted.

The condescension
that many show their readers is an even bigger problem. It takes no
special genius to point out that if you are contemptuous of your
customers, you are going to have a hard time getting them to buy your
product. Newspapers are no exception.

I became an editor
and owner well before I had planned. It happened when my father died,
and I was called home from Oxford. That was how I found myself a
newspaper proprietor at the age of 22. I was so young and so new to the
business, when I pulled my car into the lot on my first day, the garage
attendant admonished me, 'Hey, sonny, you can't park here.'

That paper was The Adelaide News.
Its newsroom was a noisy place. But it was noise with purpose. The
chattering and pounding of typewriter keys reached a crescendo in the
minutes before a deadline that was stretched beyond breaking point by
gun reporters determined to get the latest, freshest version of a story.

That
background music created an urgency all of its own. When the presses
began to run, everyone in the building felt the rumble. And when the
presses were late, the journalists felt me rumble.

When I took over the News, The Adelaide Advertiser
was the dominant paper in town. Its owners tried to get my mother to
sell to them. They sent her a letter basically saying that if she
didn't accept their offer, they were going to put the News out of business. We responded by printing their letter on the front page of the News.

The
result was a good old-fashioned stoush—a newspaper war. It cost a great
deal. But it taught me that with good editors and a loyal readership,
you can challenge better-heeled and more established rivals—and
succeed. And we did.

A decade later, there was another
test: creating Australia's first national paper. That might not sound
like a big deal today. But it was back in the 1960s, when the country
was only barely linked by phone lines. Our plan was to start a paper in
Canberra, build it, and then take it national.

If the
technological challenges were not daunting enough, our competitors got
wind of our plans. As soon as they did, they transformed the existing
paper—The Canberra Times—into a pretty impressive broadsheet.
By doing that, they hoped to grab readers and advertisers before we
could even get off the ground. There was only one way to respond: we
would have to go national almost two years ahead of schedule.

Today,
of course, even the smallest Australian newspaper has a web page that
you can log in to from Cairns to Caracas. But back then, we didn't even
have reliable fax lines. Instead, we had to fly the printing plates
from Canberra to presses elsewhere in the country—usually late at
night. We even started up our own airline to do it.

It
was all complex, and of course, things did not always go to plan. But
it was also exhilarating. The result was that we brought readers across
Australia a better product, and helped transform Australian journalism.

All this was excellent preparation for the next big fight we had: the opening of our new presses at Wapping in England.

For
those who are too young to remember those daunting days, let me give
you some perspective. Back in the mid-1980s, British papers were
essentially run by their unions, and these unions resisted all
improvements.

These were not unions acting on behalf of
the working class, but a cosy, corrupt closed shop. Some of the names
that drew pay cheques didn't even exist. Our payroll showed that
cheques were being sent to people like M. Mouse and D. Duck—neither of
whom paid income tax.

At a time when new printing
technology was making other papers around the world more efficient,
newspapers in Britain were forced to rely on a technology that had not
changed much since Gutenberg's Bible. The costs were destroying
hundreds of jobs and crippling what is now the world's most vibrant
newspaper market.

This was not sustainable in the long
run. The columnist Bernard Levin described Fleet Street this way:
'Conditions which combined a protection racket with a lunatic asylum.'

We
decided to change that. We bought new, state of the art presses,
installed them at a site in Wapping, and found good people to run them.

In the end, it was expensive. There was terrible
violence, especially against the police. Those workers who chose to
fight us expected that management would roll over as so many
managements had in the past. And for a few weeks, we were literally
under siege by people intent on damaging our presses, hurting our
people, and killing our business.

But we had planned
well, and we prevailed. Our victory helped make all British newspapers
more profitable. And of course this meant better wages and a brighter
future for their employees.

Today the challenge we face is different. In some ways, it is a direct attack on our judgment.

It
used to be that a handful of editors could decide what was news—and
what was not. They acted as sort of demigods. If they ran a story, it
became news. If they ignored an event, it never happened.

Today
editors are losing this power. The internet, for example, provides
access to thousands of new sources that cover things an editor might
ignore. And if you aren't satisfied with that, you can start up your
own blog and cover and comment on the news yourself.

Journalists
like to think of themselves as watchdogs, but they haven't always
responded well when the public calls them to account.

When
Dan Rather broadcast his story suggesting President Bush had evaded
service during his days in the National Guard, bloggers quickly exposed
the dubious nature of his sources and documents.

Far
from celebrating this citizen journalism, the establishment media
reacted defensively. During an appearance on Fox News, a CBS executive
attacked the bloggers in a statement that will go down in the annals of
arrogance.

'60 Minutes,' he said, was a
professional organisation with 'multiple layers of checks and
balances.' By contrast, he dismissed the blogger as 'a guy sitting in
his living room in his pajamas writing.' But eventually it was the guys
sitting in their pajamas who forced Mr Rather and his producer to
resign.

Mr. Rather and his defenders are not alone. A
recent American study reported that many editors and reporters simply
do not trust their readers to make good decisions. Let's be clear about
what this means. This is a polite way of saying that these editors and
reporters think their readers are too stupid to think for themselves.

By
taking their audience for granted and allowing themselves to become as
institutionalised as any government or company they write about, these
journalists are threatening their own papers. It is simply
extraordinary that so many who are privileged to sit in the front row
and write the first account of history could be so immune to its
obvious meaning—not to mention the consequences for their own industry.

Let me give you an example. Four years ago The Times
of London was going through a difficult time in circulation. So we
experimented with changing from a broadsheet to what we call a
'compact' version. For almost a year, we printed two versions of The Times—each with the same photos, the same headlines, and the same stories.

By
an overwhelming margin, readers preferred the new, compact version. So
we adopted that version , reversed our decline in circulation, and
helped put The Times on a more solid footing, which of course is the key to keeping jobs. And we did it without affecting the quality of the news.

You might think our experience with The Times
would be a good lesson about responding to what readers want, and
keeping a newspaper relevant and viable. But that's not what most
journalists wrote about. Instead, they offered a lot of hand-wringing
about tradition—and sentimental laments for a format that most Times readers no longer cared for.

I
see the same thing every day. Instead of finding stories that are
relevant to their readers' lives, papers run stories reflecting their
own interests. Instead of writing for their audience, they are writing
for their fellow journalists. And instead of commissioning stories that
will gain them readers, some editors commission stories whose sole
purpose is the quest for a prize.

When I started out in
the business, anyone who dared parade a prize for excellence would have
been hooted out of the newsroom for taking himself too seriously. But
today the desire for awards has become a fetish. Papers may be losing
money, losing circulation, and laying off people left and right. But
they will have a wall full of awards—prisoners of the past rather than
enthusiasts for the future.

Readers want news as much as they ever did. Today The Times
of London is read by a diverse global audience of 26 million people
each month. That is an audience larger than the entire population of
Australia—an audience whose sheer size is beyond the comprehension and
ambitions of its founders in 1785. That single statistic tells you that
there is a discerning audience for news.

The operative word is discerning. To compete today, you can't offer the old one-size-fits-all approach to news.

The
defining digital trend in content is the increasing sophistication of
search. You can already customise your news flow, whether by country,
company or subject. A decade from now, the offerings will be even more
sophisticated. You will be able to satisfy your unique interests and
search for unique content.

After all, a female university
student in Malaysia is not going to have the same interests as a
60-year-old Manhattan executive. Closer to home, your teenage son is
not going to have the same interests as your mother. The challenge is
to use a newspaper's brand while allowing readers to personalise the
news for themselves—and then deliver it in the ways that they want.

This is what we are now trying to do at The Wall Street Journal.
The journal has the advantage of having a very loyal readership, a
brand known for quality and editors who take the readers and their
interest seriously.

This helps explain why the journal
continues to defy industry trends. Of the ten largest papers in the
United States, the journal is the only one to have grown its paid
subscriptions last year.

At the same time, we intend to
make our mark on the digital frontier. The Journal is already the only
US. newspaper that makes real money online. One reason for this is a
growing global demand for business news and for accurate news.
Integrity is not just a characteristic of our company, it is a selling
point.

One way we are planning to take advantage of online
opportunities is by offering three tiers of content. The first will be
the news that we put online for free. The second will be available for
those who subscribe to wsj.com. And the third will be a
premium service, designed to give its customers the ability to
customise high-end financial news and analysis from around the world.

In
all we do, we're going to deliver it in ways that best fit our readers'
preferences: on web pages they can access from home or work on still
evolving inventions like Amazon's kindle as well as on cell phones or blackberries.

In
the end, we are left with where we began: the bond of trust between
readers and their paper. Much has changed since I walked into the Adelaide News
in 1954. Presses have never been faster or more flexible. We have
computers that allow you to lay out multiple pages in multiple
countries. We have faster distribution. But none of it will mean
anything for newspapers unless we meet our first responsibility:
earning the trust and loyalty of our readers.

I do not
claim to have all the answers. Given the realities of modern
technology, this very radio address can be sliced and digitally diced.
It can be accessed in a day or a month or a decade. And I can rightly
be held to account in perpetuity for the points on which I am proven
wrong—as well as mocked for my inability to see just how much more
different the world had become.

But I don't think I will
be proven wrong on one point. The newspaper, or a very close electronic
cousin, will always be around. It may not be thrown on your front
doorstep the way it is today. But the thud it makes as it lands will
continue to echo around society and the world.